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Improve Your Credit Score in 3 Steps


If you want to improve your credit score, all you have to do is follow these three easy steps, let time do its thing, and you’ll succeed.

When you were in school, you got a report card to let your parents know how well you were doing, right? Well, a credit score is a financial report card to let the banks and lenders know how well you’re doing.

Why is having a good credit score important? Well, it’s a magic number that let’s money lenders know that you’re an ideal person to lend money to. If you want to finance a car, buy a house, or open another credit card, the lenders will check your credit score.

If you want to make big purchases without cash (and get a low-interest rate), then you’re gonna need to have a really great score (751 or higher).

5 Reasons You Need a Kick-Ass Credit Score

  1. Lower Insurance Rates: Did you know that some (if not all) insurance companies run a credit check on you when you purchase insurance? It turns out that having a good credit score will save you 15% or more on car insurance — thanks, Geico!
  2. Buyer Protection: When you use a credit card for your purchases, you get outstanding buyer protection, something using a debit card or cash can’t bestow.
  3. Help with Renting: If you’re looking to rent a place to live, the landlord will run a credit check and might deny you housing because of a poor score. I’m a landlord, and I ran a credit check on my tenant.
  4. Lower Interest Rates on Houses and Cars: Yes, the better your credit score, the lower your interest rates. Might not seem fair to everyone, but that’s the way it is, and I think the best reason to care about your credit score.
  5. Employment: This one came as a shock to me, but it turns out that you could be denied a job because of your credit score. It’s an awful truth, but adds weight to the reason you need a kick-ass credit score: makes you look responsible to employers.

While you might read a bunch of articles online filled with tips on increasing your credit score, there are only three things you need to do to improve it. Don’t get bogged down with the little shit that doesn’t matter. In this case, big wins go a long way, and if you follow these three simple steps, you will learn how to improve your credit score over time. There is no quickie — sucks, I know.

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1. Get Your Score

How can you improve your score if you don’t know what it is? It’s like losing weight when you don’t know how much you weigh — how will you know if you’re making any progress?

Luckily, there is a website that will let you check and monitor your credit score for free: Andrew and I both use this site because it’s free and the layout is easy to understand.

NOTE: Watch out for other “free credit report” sites. Some of them will ask for a credit card, and you NEVER need to pay for a simple report like this. By law, you can access a credit report once a year for free.

This is the first step. Once you find out your score, you can determine if it even needs to be improved upon. Hopefully, if your score is above 751, you won’t have to do much but continue what you’re already doing.

2. Set Up Automatic Bill Pay

This is arguably the most crucial mistake people make. If you don’t pay your bills on time, it’s going to affect your score in a very big way. I know we’re all human and not everyone is perfect, but there are ways to protect yourself against…well, yourself.

Even if you’re the best and most punctual bill payer, you never know what might happen in the future. This is why it’s a good idea to make all your bill payments automatic.

I suggest you set up automatic bill pay with your checking account to automatically pay at least the minimum payments on all your bills. By doing this, you will never miss a payment. And don’t worry if you accidentally overpay, because you can get your money back in a check if you request it.

This is the easiest way to improve your credit score. If you haven’t been good, it may take a while to improve, but once you set it up automatically, you won’t have to worry about this.

3. Increase Your Credit

Debt to credit ratio is the amount of available credit versus used credit. Lowering your credit utilization will increase your credit score.

For example, if you have a credit card with a $1,000 credit limit, and you spent $500 (leaving your an available balance of $500), you are using 50%.

The goal here is to keep it under 20% at all times. Also, the more credit you have, the higher your score.

The most important thing you can do here is to keep your debt low by setting your limits. Right now I have a credit card that has a $3,000 credit limit. However, I imagine that I can only spend $600 a month (and immediately pay it off). Some credit card companies will even let you set alerts to notify you when you go over a certain amount that you set.

If 20% is too low for you, you can increase the amount of credit you have available.

There are two ways to do this:

  • Call your credit card company and ask to increase your credit limit.
  • Open another credit card.
  • As a talking head for “making things easy,” I recommend you try the first way, first. It’s an easy phone call to make, and it will improve your credit score.

If they don’t give you an increase, you might want to think about opening another credit card to give yourself more overall credit. However, do some homework before you go opening up all kinds of credit cards. I recommend having no more than three credit cards that you will use.

When searching for the perfect credit card, look for these factors:

  • Absolutely no annual fee
  • A reward system that you will take advantage of
  • An annual interest rate of 15% (the lower, the better if you’re not good at paying off your debt every month).

I simply called up my credit card company and asked them to increase my credit limit by $2,000, and they did. It was the easiest thing in the world. I even recorded the conversation and turned it into a YouTube video so you can see how I did it. Of course, I edited out the four questions they asked because they were personal, but they only asked what my annual income was, if I owned or rented my place, what my social was, and when I was born.

Do Something Right Now To Improve Your Score

Great, you finished the article, and now it’s time to take action. I know it seems simple, and truthfully, it is. You don’t need to fret over the little things. If you take action on these three steps and give it some time, your credit score will improve drastically.

So I want you to do these things, and check them off as you go:

  1. Open an account with and write down your credit score in a place you’ll always see it.
  2. Set up automatic bill pay on all your loans and credit cards with your checking account (minimum balance only).
  3. Do whatever it takes to pay down your debt. Click here if you need help with that.
  4. Call your credit card companies and ask for a credit increase (and ask for a lower interest rate while you’re on the phone).
  5. If you can’t get a limit increase, look for another credit card you like and open an account.

Wait six months to one full year before checking your credit score again. You don’t want to drive yourself mad checking your score every day. Nothing is going to change overnight, but if you follow these steps, your score will improve, and you’ll be patting yourself on the back in no time.

Featured Image Photo Credit: “3D Bullseye” by Chris Potter from

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